HISTORICALLY European companies were more successful in the development of international business than US companies.

HISTORICALLY European companies were more successful in the development of international business than US companies.

The reasons for this including the fact that US companies focused on the domestic market, which was big enough to support substantial business.

European companies focused on international markets because their local markets were small and fragmented.

European companies also had a better understanding of international markets because of their proximity to customers with difference preferences, cultures and languages and long history of colonisation.

Europeans were better trained to do the commercial activities required internation-ally including dealing with foreign governments and bureaucracies, local rules and regulations and trading currencies and commodities.

Europeans were less constrained by US rules regarding foreign corruption practices.

The Europeans were very successful in Europe, the Middle East, Africa and Asia, but were not successful in the US market.

Reasons included the fact that US companies were better equipped and capitalised, had more aggressive management, capital to invest in new technologies and better incentives for entrepreneurs.

Europeans did not under-stand the US market, which was different from the rest of the world, for example big gas guzzling cars with chrome fins, power steering and soft suspension.

In the 1970s US companies recognised the opportunities presented in the relatively affluent European countries and in the underdeveloped countries with large populations.

The US government provided financial support to developing countries, which gave US companies some competitive advantage.

US companies generally went after the international markets by creating direct sales companies in Europe and by using distributors in Asia. They were successful worldwide with products that were unique and not available from local suppliers, but generally were not successful in Europe, where local competition had captive markets and support from local governments.

In the 1980s US companies sought growth by acquiring European companies and by creating local manufacturing facilities to take advantage of low labour costs in under-developed countries.

In the '90s large European companies attacked the US market by buying US companies and buying technology available only in the US.

Today we live in a global economy with many successful US, European and Asian multi-national companies competing effectively in all major world markets.

From the consumer point of view these major international companies have no doubt reduced the cost of many consumer products and in the period from 1960-1990 created many local jobs in areas like Wales where they invested in new factories to produce their products for supply to European markets.

Today I believe the pattern has changed considerably due to the global change of the international political scene. China in the past 10 years has opened its doors to encourage major international companies to invest in new plant offering a well educated, highly disciplined labour force but at cost probably less than 4% of the USA and European communities. Russia in the past 10 years has also changed from one large community group with very tightly controlled borders, to now approximately 12 individual countries, again, highly skilled, well educated labour force, determined to improve their living standards to match the US and the rest of Europe.

During my working career I have been involved in several companies exporting products and I always supported the free markets principle, no tariffs or import duties between countries.

I supported the original formation of the common market because for the first time in manufacturing terms we were developing a population with market potential similar to the US. Over the past 40 years the standard of living in our country has dramatically improved but I am very concerned about my three grandchildren, as I am certain the international competition the next generation will have, the need to improve their standards will be enormous.

The major international companies have a duty to their shareholders, often the large pension funds, to product the best profits. So they in the 1990s have moved many low skilled manufacturing jobs to low cost countries like China and we must realise that with a billion plus population it will take decades to get their people's standards similar to ours.

What our politicians and many business people say is that to pay for the imports from a low cost country, we must export hi-tech products. What is definitely becoming clear is the number of hi-tech jobs created will never replace the loss of low-tech jobs.

Take Germany for example. In 1990 the Berlin Wall came down and West Germany, with approximately 56 million people, merged with East Germany with 17 million people. In the past 11 years Germany now has moved from the lowest unemployment, highest standard of living in the common market to high unemployment over 10% and higher personal taxes. Consequently living standards have dropped.

In 2004 the current European community of approximately 360 million people will have 80 million from other low paid countries join them.

This, together with the everincreasing industrial base of China, poises a real threat to the wealth of future generations in this country. The time is right to consider the imposition of tariffs to stem the tide.

If you want to comment on Alf Gooding's column or that of Economic Development Minister Andrew Davies, or any business issue, please e-mail, in no more than 200 words, Sion Barry, Business Editor, at sion.barry@wme.co.uk